Doing Business in the Philippines

The Philippine business environment is highly personalized. A proper introduction by a trusted intermediary is the best way to enter this market. The U.S. Commercial Service performs this function for American manufacturers (and their representatives) through our business matchmaking programs, which are described here.

Business Culture

Business matters are always best dealt with on a face-to-face basis in a warm and pleasant atmosphere. While many Western businesspersons thinks that time is gold and want to get to the point immediately, the Filipino likes to be indirect, talk about mutual friends and family, exchange pleasantries, and share a joke or two. Only after establishing a cordial atmosphere will people negotiate. No matter what the final result, the discussions should always end cheerfully. Americans adapting to this cultural practice will have an advantage. To a Filipino, cultivating a friend, establishing a valuable contact and developing personal rapport are what make business wheels turn. The Filipino way of doing business is a confluence of the East and West.

In setting up appointments, especially in government offices, it is most advantageous if a “go-between” or someone with previous connections to that office can make some form of introduction on behalf of the requesting party. Mid-morning or afternoon meetings are preferred, and a follow up call to confirm the meeting a day before is recommended. Allow for at least fifteen minutes leeway before your Filipino contact arrives for an appointment. For VIPs, waiting time could be longer.

After the requisite small talk following the introductions, a typical business meeting would focus mainly on the agenda at hand. Specific conclusions would not necessarily be achieved during the initial meeting, but Filipinos would usually be amenable to follow up discussions or negotiations. A formal agreement or contract may take a longer time to be finalized compared with what Westerners are used to.

Moreover, as in most Asian cultures, Filipinos would rather avoid “loss of face” or public humiliation. Therefore, Filipino contacts prefer an atmosphere of calm and restraint, avoid direct confrontation, and would typically offer a polite reply coupled with a smile rather than an outright negative feedback to the other party’s ideas. A “yes” may mean a lot of things therefore one should be aware of the subtleties of a particular conversation.

Philippine business has its own etiquette. For example, as a show of respect, Filipinos usually address people by their titles (e.g., Architect Cruz, Attorney Jose, Dr. Romero) although the professional might request a more informal approach (e.g., addressing them by their nicknames) after the formal introduction. In dealing with high-ranking government and military officials, it is best to address them by their formal titles (e.g., Secretary Flores, General Alfonso, Director Santos, Admiral Lopez, etc.)

Handing out business cards (preferably bearing your position or title) is standard procedure, although the manner in which the cards are exchanged tend to be rather informal as compared with other cultures. If a Filipino contact gives you a personal number (e.g., home or mobile) aside from what is indicated on the business card, it is usually an invitation to call, and is a good sign for establishing cordial relations.

The U.S. businessperson should avoid, as much as possible, personally grappling with the bureaucracy. Customs, for instance, requires many signatures to clear air cargo. The Filipino approach to the problem is to use staff capable of moving through the bureaucracy. Whether getting a driver's license or registering a car, the U.S. business executive will benefit by delegating the chore to a someone able to negotiate through a sea of desks, with a smile and a knack for delivering token gifts or keepsakes.

Observing office etiquette is also important. When reprimanding employees, take them aside and do it privately. Be as gentle as possible and always make it a point to end the meeting with some show of personal concern for his family to make him feel he is still part of the team and that the criticism is not personal. Again, this is consistent with avoiding “loss of face”.

English is the official business language, so Americans may not find a difficult time to strike up a conversation. Most correspondences, contracts, and other documents are written in English. Among Filipinos, however, it is common to hear “Taglish” (a combination of Tagalog, a regional dialect from which the Filipino language is largely based, and English, or shifting back and forth between the two languages) during informal conversations. Body language and hand gestures (e.g., a raised eyebrow, a faint smile, a scratch in the head) are also integral to how Filipinos express themselves. Texting, or sending short messages through mobile phones, has now become a choice medium.

Business lunches and dinners are usually arranged personally over the phone and confirmed by the secretary. The person who invites customarily pays. A guest does not order the most expensive items on the menu, unless the host insists otherwise. It is also customary to have a drink before sitting at a dining table. A pleasant atmosphere and a minimum of formality is the tone. Business is not usually discussed until after establishing a convivial ambience, usually after soup or appetizer. Dress is according to venue.

Filipinos tend to be relaxed in replying to RSVPs. Telephone follow-ups are best, about three days before. Party hosts usually have staff track down guests for a confirmation reply. In a formal occasion, seating is arranged. There is usually a head table for the VIPs. A guest speaker is often the highlight of the dinner. Light entertainment is not unusual. In most instances, important guests accept requests to sing. Americans with vocal talents can score in the Philippines.

Christmas is also a time to show appreciation to people with whom you have regular dealings with, e.g., the security guard, doorman, messenger, as well as good customers and clients, through token gifts. Gifts could range from baskets of goodies to company giveaways to plain calendars or office items with your company logo.

Office hours for business firms and the Philippine Government normally are from 8:00 a.m. to 5:00 p.m., with a one-hour lunch break. Most banks are open from 9:00 a.m. to 3:00 p.m. It is best to attempt to accomplish business objectives in midmorning or late afternoon. Many business deals are completed informally during meals, entertainment, or over a round of golf. Offices are generally closed on Saturdays and Sundays.

Summer-weight clothing normally worn in temperate zones is suitable for the Philippines. It is acceptable for businessmen to conduct calls in short or long-sleeved shirt and ties without a coat. Either a two-piece suit or the native "barong tagalog" (a lightweight, long-sleeved shirt worn without a tie) are acceptable, ordinary business attire. Light suits and dresses are appropriate for women.

Travel Advisory and Visas

Up to date travel advisories are available from the State Department's website http://www.state.gov. Americans who wish to enter the Philippines for business purposes can enter and remain in the country for specific time periods as non immigrants under provisions of Philippine Immigration Law.

Persons may come and stay in the Philippine for business, pleasure or health reasons without a visa for not more than 21 days and are exempt from payment of immigration fees and charges. This may be extended for another 38 days through a visa waiver. Thereafter, they may apply for the regular monthly extensions for a maximum stay of one year and fifty-nine days.

Temporary visitors who have been allowed to stay in the country for more than six (6) months may apply for Alien Certificate of Registration (ACR) and Certificate of Residence as Temporary Visitor (CRTV) with the main office of the Bureau of Immigration (BI) or with its sub-ports, which have territorial jurisdiction over these aliens.